Question

The Bohring Company manufactures a sophisticated radar unit that is used in a fighter aircraft built by Seaways Aircraft. The first 50 units of the radar unit have been completed, and Bohring is preparing to submit a proposal to Seaways Aircraft to manufacture the next 50 units. Bohring wants to submit a competitive bid, but at the same time, it wants to ensure that all the costs of manufacturing the radar unit are fully covered. As part of this process, Bohring is attempting to develop a standard for the number of labor hours required to manufacture each radar unit. Developing a labor standard has been a continuing problem in the past. The file P10_70.xlsx lists the number of labor hours required for each of the first 50 units of production. Bohring accountants want to see whether regression analysis, together with the concept of learning curves, can help solve the company’s problem.